STOCK MARKET TERMS: KEY WORDS 
      RSE 
      The Rwanda Stock exchange 
      A Stock Exchange is the physical location where the stock market in a country is traded, or 
      the electronic platform used to effect such trade. In Rwanda; the Rwanda Stock Exchange is 
      currently the only licensed stock exchange .It was established in 2011. 
      CMA  
      Capital Market Authority  
      The capital market authority is the overall industry regulator in Rwanda. It was established 
      by an act of parliament to promote, regulate and facilitate the development of an orderly, 
      fair and efficient capital market in Rwanda. 
      Stock market  
      It is known as the equity market. It is where the buying and selling of stocks takes place .It is 
      the market in which shares are issued and traded either through exchanges or over –the-
      counter trading. It provides companies with access to capital and investors with a slice of 
      ownership  in  the  company  and  the  potential  of  gains  based  on  the  company’s  future 
      performance. 
      Stock 
      It  is  also  known  as  a  share  of  stock.  A  stock  is  a  small  share  that  represents  a  partial 
      ownership of a company. Stocks are issued by companies. 
      CSDS 
      The Central Exchange Depository System 
      The Central Exchange Depository System can be compared to a bank where the records of all 
      share  holding  of  listed  companies  are  kept.  It  is  data  base  where  investors  can  open 
      accounts called Central Exchange Depository (CSD) and debit them with shares/bonds for 
      the purpose of trading. 
      CDA 
      Central Depository Agent 
      Central Depository Agent can either be a stockbroker or a custodian bank that has been 
      granted authority by central bank (BNR) to open, close or transfer accounts in the central 
      depository system on behalf of investors. 
       
       
       
      PART TWO: 
      STOCK MARKET TERMS: GLOSSARY 
      Acquisition 
      An acquisition is when one company makes a bid to acquire control of another (called the 
      target). It can either be hostile or friendly. 
      Active Shares 
      These  are  shares  which  are  most  frequently  traded  (brought  and  sold)  at  the  RSE,  as 
      distinguished from partly active shares in which trading is not frequent. The shares of most 
      leading companies are active. 
      Agent 
      An  agent  is  an  appointed  representative  (of  a  stockbroker  or  investment  bank)  who  is 
      authorized to transact the business of buying and selling shares for a commission through 
      and on behalf of the stockbroker or investment bank. 
      All or None (AON) 
      This is a restriction placed on a buy or sell order that instructs the broker to fill the order 
      completely by the close of the market or the order should not take place. 
      Allotment Letter 
      This is the document issued by a company to its investors showing the number and value of 
      shares allotted to the applicant after successful subscription. 
      Amalgamation 
      This is when two companies, previously independent of one another combine to form a new 
      company. 
      Annual Report 
      A publication issued by a company to its shareholders at the company’s fiscal year end. The 
      document typically includes financial statements reports on operations, the auditor’s report 
      and other relevant information on the company. It is mandatory for all public companies. 
      Annual General Meetings 
      This is a mandatory meeting held once a year by all public companies. The directors of the 
      company report to the shareholders on the year’s performance and future of the company. 
      All  shareholders  are  invited  and  allowed  to  ask  questions.  Notice  of  such  meeting  is 
      mandatory. 
      Articles of Association 
      This is document describing the purpose, place of business and details of a company. Every 
      incorporated  company  in  Rwanda  by  law  must  have  and  submit  this  document  to  the 
      registrar of companies ad work by what it stipulates. The article of association together with 
      the memorandum of association forms the constitution of the company. 
      Ask 
      It is also known as the offer price. It is the lowest price which a seller is willing to accept for a 
      security. It is also typically stipulates the amount of the security the seller is willing to sell. 
      Assets 
      This is anything owned by a company that has a market value. This includes land, buildings, 
      equipment, furniture, cash, bank deposits, manufactured goods ready, goodwill, trademarks 
      etc. 
      At Best Order 
      This is an instruction from a client to a broker authorizing the broker to use his discretion 
      and try to execute an order at the best possible price. 
      Authorized Shares (Stock) 
      This is the total number of shares that a company is permitted to issue according to its 
      memorandum and articles of association. This number can only be increased if a resolution 
      is passed to that effect by the majority of the shareholders and an application made to the 
      registrar of companies. 
      Authorized Share Capital 
      The authorized share capital is calculated by multiplying the nominal share value with the 
      total  number  of  authorized  shares.  This  is  stated  in  the  memorandum  and  articles  of 
      association as required by law. 
      Automated Trading System (ATS) 
      This  is  the  online  trading  system  software  used  by  Stock  Exchange  to  effect  all  trading 
      transactions. It can be accessed through the stock trading floor (through the Local Area 
      Network) or from the stockbroker’s offices (through the Wide Area Network).  
      Averaging Down 
      Buying more shares in a company at a price that is lower than the price paid for the initial 
      investment. The aim of averaging down is to reduce the average cost per share bought. 
      Back Office 
      Refers to that segment of a stockbroker’s office that has little or no direct relationships with 
      the public but which is generally responsible for nearly all processes involved in effecting a 
      transaction. 
      Bad Delivery 
      This  is  when  the  delivery  of  a  share  certificate,  together  with  the  deed  of  transfer  is 
      considered defective or if it is not delivered within the stipulated period. Defects may arise 
      from mutilation, correction, overwriting, erasure, alterations, illegibility, inconsistencies in 
      names, missing details etc. 
      Basis Point 
      One hundredth of a percentage point. Example: the difference between 3.50% and 3.75% is 
      25 basis points. 
      Bear 
      A stock market speculator who expects share prices to fall and therefore keeps selling in 
      anticipation to buy the shares later at a lower price. All individuals can be bearish at times 
      although some are perennially so. The term is derived from the attacking posture of the 
      bear; pushing downwards. 
      Bear Market/ Bear Cycle 
      An extended period when share prices generally keep falling and the stock market index 
      keeps going down. 
      Bell 
      Refers to the bell which is sounded to open and close trading at the Rwanda Stock Exchange 
      Trading Floor, thus the Opening Bell and Closing Bell respectively. 
      Beneficial Owner 
      A beneficial owner is the true owner of a security who enjoys the benefits of ownership even 
      though the title could be in another name. 
      Bid 
      The highest price a buyer is willing to pay for a stock. It stipulates both the price and the 
      quantity that the buyer requires to purchase. 
      Block Order 
      An order placed for the transaction (purchase or sale) of a very large quantity of exchange. 
      Blue Chip Stocks 
      Are the stocks of leading, well established, capitalized and nationally known companies that 
      have a proven record of earnings and pay a reasonable dividend. 
      Bonds 
      Bonds are also referred to as fixed income exchange. They are promissory notes issued by 
      government  and  corporations  that  entitle  the  investor  to  a  specific  interest  at  specific 
      intervals  over  a  specific  length  of  time  and  receive  the  principal  upon  maturity.  Unlike 
      shares, bonds do not carry with them any sense of ownership but guarantee interest even 
      when the issuer does not register a profit.